Abstract
Abstract As the urgency for green transformation grows, the question of whether finance capital can be harnessed to promote green transformation has been raised. Public pension funds are of particular interest since they are publicly governed, have long-term interest, and are growing in proportion to the global investment capital. However, transformative change demands a reprioritization of fundamental values in terms of trade-offs among economic, environmental, and social ends. This article identifies shifts in value judgments in public pension fund investments and particularly focuses on the institutional constraints by which value (re)priorities are resisted by investigating Swedish public pension funds. While there are signs of environmental embedding of the economy, I also note neutralization of the role and investment strategies of the funds, which has a stabilizing rather than a transformative function. The neutralization constrains deep green transformation, which demands politicization of the role of institutional investors.
Highlights
As the urgency for green transformation grows, the question of whether finance capital can be harnessed to promote green transformation has been raised
Value Judgments at the Heart of Green Transformation there is an underlying tension between the economic perspective, where the market is represented in neutral terms, and the moral perspective that emphasizes the political nature of investments and the normative impact of investment strategies
This article focuses on this tension and how it affects public pension funds, which are run by large-scale, politically governed institutional investors
Summary
At the heart of transformative change is a shift in understanding of values fundamental to organization of society, their prioritization, and their relations (Hall 1993; Meadows 1999). As societies develop, tensions and contradictions within societal institutions become apparent, during crises, which reveal weaknesses in the current order (Hay 1999; Standring 2018) Such a rupture in the dominant discourse opens it to a more substantial critique of core assumptions and concealed value judgments of the dominant discourse. Proponents of deep transformation challenge the possibility of green growth based on a transition to renewable energy, which neglects the effects of an expanding economy that remains based on exploiting natural resources (Jackson 2009). Shallow transformation (within market capitalism) implies an opportunity for finance to move capital into technologies and sectors at the right time by giving careful attention to shifting policies and legislation In this way, institutional investors may strengthen market signals and enforce a shift to renewable energy. Deep green transformation implies a radically different context for financial investment and a shift in investment rationality to weigh environmental and social ends against financial goals
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